Auto-Enrolment – This may mean you

Since April 2012 every PAYE scheme registered with HM Revenue & Customs will have been assigned what is called a Staging Date by the Pensions Regulator. The Staging Date is the date by which all employees subject to a PAYE scheme must be enrolled into an occupational pension scheme. The first Staging Dates began to arrive during 2014 and will run through to 2018.

What does all of this mean for proprietors and stakeholders of businesses? Simply put, if you have employees, you must begin to take steps to ensure they are enrolled into a pension plan provided by a private underwriter or a Government-backed scheme, called NEST, by the time the Staging Date arrives – there will be fines for non-compliance.

A key point to understand is that employees can opt-out of auto-enrolment, but employers must re-enroll all employees on each and every third anniversary of the staging date. This may present challenges for payroll software and there are other considerations to factor in, like:

  • I’ve received notification of a PAYE scheme but I don’t have any employees – you must contact the Pensions Regulator to advise that no employees will be enrolled before the Staging Date Arrives
  • I’m ceasing to trade (for whatever reason) – as above you must inform the Pensions Regulator that no employees will be enrolled before the Staging Date or at any subsequent third anniversary
  • I’m looking to sell/transfer my business to a new owner – depending upon whether the Staging Date has been reached or not, care must be taken when dealing with employee rights under The Transfer of Undertakings (Protection of Employment) Regulations 2006

Whilst EWS is not authorised to provide specific pension investment advice, you may wish to contact us for a free consultation if you feel any of the points raised above may impact upon your business.